Thackray Williams

In these tough economic times tenants may want to dispose of their leases or reduce the cost of rent. Here are some options for terminating leases and reducing liabilities:

1 You may have a break right within your lease. The terms of the break clause should be looked at very closely to ensure that any pre-conditions of the break can be complied with, for example you may have to be up to date with your rent, give vacant possession of the property and give a specific period of notice to your Landlord amongst other things. This break right would allow you to terminate your lease without the need for your Landlord’s consent.
2 You may be able to agree terms with your landlord for an earlier surrender of your lease even if there is no break entitlement, although your Landlord might request that you pay a premium for this early surrender as it may leave him/her without a tenant.  
3 Your lease may allow you to assign (transfer) or underlet the premises subject to the Landlord consenting.  This may not be as attractive to you as you will need to find a third party who would want to take the premises over. In addition, this option will not be a clean break as you will retain some liability for guaranteeing the incoming tenant on an assignment, but this may be your only option.
4 You could ask the Landlord to agree to reduce the rent for a short period of time to enable you to continue to trade. This could be in exchange for an increased term to give the Landlord some long term security.
5 You could ask the Landlord to accept rental payments monthly rather than quarterly to help with your cashflow.

For more information contact Vikki Herbert on 020 8290 0440 or email:vikki.herbert@thackraywilliams.com